Eric Schlissel

“Eric, what do you do for a living?” It’s a good question. Well, I don’t have business cards and I try to schedule meetings around happy hour. I don’t like dressing up, and I really don’t like waking up early. But I do love breakfast.

It’s actually a simple answer. I am a serial entrepreneur in the tech industry. Over the last 12 years I’ve created and developed series of companies, some big, some small, some successful, some FAILful. I won’t get into boring details and ancient history, it’s all a Goggle search away if you want to read the parts I’ve put in my bio. However, an entrepreneurs bio always reads dry - it doesn’t talk about the roller coaster ride that we face on a daily basis, it doesn’t describe the pride of bringing a successful product to market or the euphoria of selling a company. It certainly doesn’t talk about the heartbreak we face when one of our projects fails, and we’re forced to reconcile with some of the deepest, darkest corners of human nature.

Fortunately, I’ve had more successful ventures than failed ones, but it only takes one failure to teach you (if you’re paying attention) the harsh lessons that come with the reality of a soul-shaking defeat. I’ve poured my heart into every one of my ventures, and they’ve all been exceptionally meaningful experiences. Each one was a personal success, and even though very hard lessons were learned, there are only a few things I actually regret. I know that all sounds a bit melodramatic, but anyone that’s both seriously succeeded and horribly failed (at love, life or as an entrepreneur) understands the strong emotions that come with the package.

I’ve owned Geek Teknologies, Inc. for the last 12 years, which operates as the holding company I launch all of my ventures through. Along with running my consulting projects through it, Geektek provides co-location services in downtown Los Angeles. Co-lo is a great bread-and-butter business, however in less than five years it will be completely irrelevant to all but a niche market. Big companies will still run datacenters and servers for specific apps, but everything else will be in the cloud. The fight for the cloud is on, and in the end consumers and business will all win, but most service providers will lose. I’m sitting this one out while taking advantage of the opportunities the battle presents. Most people with their heads in “web 2.0” would say the co-lo business is already dead. I would remind them that hype travels much faster than reality, and that time is the enemy of any business that can be easily commodotized. Watch your backs.

My most recent software company (Social Platform LLC) developed “white-label social network,” or “social platform,” software. These are terms I coined to describe software that companies could license and brand to create their own social networks. When I founded the company there were a couple of players in the space, but they were largely message board or blogging companies trying to get in on the MySpace craze. We had a unique product and enjoyed a rapid assent, and quickly became a leader in the market. As time went on, competition for clients began to get tougher, even though there were only a few other really serious players in the market. Many software companies had slapped a “social network” label on their products, and it was beginning to look like market saturation was around the corner. I had been through this cycle several times before, so before fierce competition and inevitable consolodation came down upon us, I began taking seriously some offers I was getting from our competition, while sniffing around for other exit opportunities. We were the first in our niche to be acquired, and the market shake-out began shortly thereafter. Timing is everything. Social Platform was acquired by ONEsite Inc. about a year ago.

I spent six months with ONEsite as their VP of Western Region, at first helping transition employees and clients over to ONEsite. As the day-to-day work became sales-oriented, I became less interested in the job, and I resigned my position at an appropriate juncture. I enjoy sales. I’m good at selling. However, I’m not passionate about it. As many founders would tell you, staying on with the acquiring company tends to be a drag fairly often. We’re founders and entreprenuers, not employees. We have a hunger that most employment situations doe not satiate. ONEsite continues to be successful in a very tough market, and I wish them nothing but the best.

Since I parted ways with ONEsite, I’ve been consulting, traveling, brunching and considering my next moves. In that time our economy has tanked and the second tech bubble has burst (not “deflated”, friends, it has been resoundly crushed. Get over it, keep both eyes on your balance sheet and innovate your way out of your problems.), yet the tech industry continues to evolve at a break-neck pace. People themselves don’t move that fast. Not close to the speed of technology, and certainly nowhere near the speed of hype.

I should acknowledge that there were several months recently where I didn’t actually do much professionally, beyond some consulting projects and research. Being a consultant is a combination of being a caretaker, a problem solver, a therapist and a mediator, much like being the owner of a company, but with some signifigant differences. The biggest difference is the ability to affect change. It’s painful to watch carefully considered advice get tossed to the wayside. It’s even more painful to watch a company continue to repeat the same mistakes despite your advice. Consulting has challenges and rewards that I enjoy, but in the end its often difficult for me to be passionate about some projects. There’s nothing wrong with being a consultant, I know a great number of highly competent consultants that are worth every penny, myself included. There’s a sense of ownership that just doesn’t exist in a consultant-client relationship, no matter how much you invest yourself in the project. So, after a while, instead of looking for more consulting work I decided to take it easy. I went to the gym a lot, became knowledgeable on some subjects that interest me, and I did some traveling.

Over these last few months I’ve had a series of epiphanies with regards to my career. I’ve also undergone a serious re-alignment of my outlook of the industry. There’s nothing like free time to give a guy some perspective. I’ve been frustrated and impatient at times. Why was I not creating or finding anything inspiring? Why is this person pitching me something that already failed 5 years ago? Where are all of the great ideas? Why do I go to tech events that don’t actually accomplish anything other than a hangover?

A few weeks ago one of the people I most respect reminded me that I’ve been a successful entreprenuer since I graduated college, with one project leading to the next, for 140 months and bored for about four. That simple reminder snapped something into place. It’s time to get serious about finding another project that stimulates me and that I can be passionate about. I’ve committed myself to the process and am making some serious progress. To make sure I stay focused, I have been working from some shared office space, and will likely bounce around a bit over the coming months. Do you happen to have an underutilized office in the East side of LA and want someone to quietly sit at a desk, use your wireless and drink your coffee? I’m your guy.

There are a number of things I’m currently fascinated by. For instance, the huge spike in baby boomer social networking, pseudeo-retro-computing (a terrible term that I just made up to describe bringing bleeding-edge concepts to todays users, please don’t repeat it, its horrible), online identity unification and content federation. I’m also very interested in the wholesale failure of agencies. I see a huge opportunity waiting for a smart company with the right combination of new and old media approaches. Hybrid is very now.

On the other hand, I’m not (yet) fascinated by most location based services, hyper-personalization and iPhone apps. There, I said it. iPhone apps are still an immature market. They’re too niche to make real money with, other than a few pops here and there. Is “iFart” really the best example people can come up with for a successful iPhone app? Puh-leze. That being said, if inspiration strikes I reserve the right to make an app that texts (or pushes, if you will. #tooinsidery) right before I need to go and lets me know where the nearest clean bathroom is, along with which of my friends have used and recommend it.

Those of us in the tech industry tend to think in such broad terms and long timelines that we forget that most people have no f’ing idea what we’re talking about, much less any f’ing idea how to or even why they would use the tools we’re using and creating. Are you still trying to tell people what twitter is and/or why you love it? I rest my case. There are opportunities in these gaps we create, but if you’re too deep in the bubble you’ll miss them. Keep thinking big, but don’t forget to look around once in a while.

I love hearing pitches. If you have an idea, talk to me. Preferably over dinner and drinks on your expense account. I can promise that I’ll be honest, and that I’ll probably end up offering some feedback that you’d otherwise pay for and maybe even some introductions. Sometimes my feedback will question your most basic assumptions, but it only hurts for the first minute. The alcohol numbs the pain. Promise.

“That’s all great but what are you working on?” That’s another good quesiton, and I apologize for constantly digressing. I have a growing list of “half baked” ideas along with a few “fairly good” and even “plausable” ones that I’ve fleshed out, but a combination of high standards, market experience and my innate sense of pramgatism makes me a very tough critic. It keeps me searching and out of trouble. I know that some of the items on my list would get funding, even in this market. But going that route isn’t my style. With so many questions and given the economic calimate we’re in it’s also not advisable to take OMP unless absoloutely necessary and there’s a high probabability that we’ll all do well.

At the moment I’m doing my own thing. It’s an experiment to see if I can bring any of my simple ideas to market and achieve a certain level of success, without the pressure and overhead of “starting a business.” I’m focusing on anticipating market needs and plugging in missing functionality to existing platforms (that will make more sense when I roll out my first project). I’m learning how to wite software in Python, so I can host apps on the cloud (GAE) for free, and I plan on rolling out one “fairly good” to “plausable” idea after another, each one building on the last, gaining complexity as I go. I don’t know what will hit, if anything, but I’m sure that at the very least I’ll learn a lot, and whatever I create and the process of doing it will lead to more opportunities and ideas. It’s keeping me busy in between hearing pitches, researching ideas and writing snarky comments on the internet. In the bigger picture, I’m continuing to look at larger opportunities, and I may start a new venture when the idea and the timing are right, or maybe I’ll join a company as a founder/ceo/xyz if I find the right fit.

In a nutshell, that’s “what I do.” I think I sum it up best by my email signature “Entreprenuer, consultant and all around nice person.” Thank you for reading this!

2009 is the year that half of the web becomes a Facebook App and content providers sell you out in a desperate grab for advertising money. And you’ll go along for the ride, because it’ll be cool.

You will be given the option to sign into most of your favorite sites using your Facebook login. Most of the other login options will be lame services you’ve never heard of or a lengthy signup process. By the time the other big players (Google, Microsoft, Yahoo) get it together, FB will likely be dominant. FB will also offer the coolest widgets, the only way to comment, and the added feature of your bringing your breadcrumbs back to your FB profile for all of your friends to see. Some of us are already doing this rather hackily using FriendFeed and such, but I’m sure we’ll all line up when we can save a few clicks and have better integration. FB users will finally see how powerful aggregation can be, and, yes, it will be cool.

Instead of just opening access to the FB platform, FB has turned the tables and is giving publishers the tools to embed FB everywhere. Starting with their Comments Box release yesterday, I believe we will soon see Rate This (or Like This (hello Digg and FriendFeed!)) and Share This boxes using FB Connect. Open source developers will quickly mold these into plugins for Drupal, Wordpress and countless other platforms, making them easily available and accessible to a large array of content producers. Bonus points if FB adds a Commerce box, however I believe FB will stick to its knitting and keep commerce internal (gifts, etc.).

How do these widgets create actual revenue? The FB ad serving engine. What good are ads on websites without demographic data to target them and specific tracking data to measure performance? FB will give you this, and Google will continue to be unable to. Think of it as the Son of Beacon for the Internet at large.

Conventional wisdom says “advertising dollars dry up in a down economy.” However, I disagree. It’s true that blind and shot-gun approach (dumb) advertising is indefensible to bean counters. However, highly targeted advertising with crystal clear results will do just fine in the rough year ahead. Give the bean counters some demonstrable ROI, and they’ll open up their checkbooks. Give site owners sticky features that users love, and a way to make more money and they’ll open up their databases. At the center of this lovefest is Facebook and your profile. Feels a little dirty, right?

While the “App sites” may still not be able to make a living on advertising, and ad revenue-based business models will likely fail, FB itself will do very well, and will present site owners and entrepreneurs with a very compelling case to get hitched. Expect strange bedfellows. Expect large transactions. Expect more privacy issues. Expect to be turned out and pimped.

Oh, and in 2009 newspapers will continue their death spiral. Yawn. What’s that? The New York Times is a Facebook Connect partner? How about that.

Hat tip to @mickipedia with whom I discussed this last week over drinks.

Facebook is continuing to see tremendous growth, and the next few blog posts will explore some of the reasons why. Originally this was intended to be a single follow-up to a previous post, however it makes more sense to break it down into bite-sized pieces.

Facebook Connect

Facebook Connect is a tool which allows website owners to seamlessly integrate Facebook into their websites. The basic idea is that users can carry their identity, connections and content to other websites, such as nytimes.com, cnn.com and digg.com. CNN’s coverage of the presidential inauguration showcased the power of FB Connect. Viewers on CNN.com could log into FB and participate in a conversation around live content with their friends and others on FB while remaining on CNN. This is a powerful notion - bringing your friends with you to wherever valuable content resides. This kind of integration gives value to publishers, allowing them to tap into the FB community and brings new users to their site, and Facebook extends its reach into content other than that created by its users.

The importance of Facebook Connect cannot be understated. Comment, profile and community integration across multiple properties is the next major step in social networking, and Facebook is the undisputed leader in community. I discussed the idea of profile portability in a previous post. Truly portable profiles are likely never going to be available to users, and if they’re available, they’ll likely be second class citizens. Each profile will continue to be tied to one home, be it Facebook, MySpace, .Mac, or Google, as opposed to being tied to an encrypted smart card, cell phone or like device.

I say “each profile” because the idea of a unified profile will remain a distant vision. We’ll all continue to have several identities on different networks, however we’ll have two or three instead of the dozens we have today. There is too much value in “owning” your profile for any of the power players to let the data go and allow full unification of online identities. Despite Google’s mantra to avoid data lock-in (the inability for users to take their data and go elsewhere), they desperately want you to use them as your home. Access to your demographic data greatly increases the value of their targeted advertising, a payday they missed out on when Microsoft landed their deal with Facebook last year. It should also be noted that Yahoo has tried to get into the “social home” game many times, yet has completely blown it despite their enormous numbers of mail users. Arguably, social networks begin with the Inbox, which Yahoo owned for many, many years. Their failed attempts add up to the predicament they’re in today, but I digress.

Just today Google released a protocol combining OpenID and OAuth, two open source approaches to parts of the unified profile problem, bringing the two partial solutions together to form a united and free competitor to the marketplace. This approach to breaking through Facebook’s walled garden may create a few cracks, however, Google will need to push this standard to its partners, and potentially incentivize them to implement it, either by paying a flat rate, the same way it subsidises FireFox installations on Windows, or by subsidies in the form or advertising credits.

Facebook has set the bar for Google and the others, and has already opened up a demanding lead. Google’s not standing still, neither are Microsoft, Apple and Yahoo. I’m looking forward to seeing this play out, especially with regards to smaller publishers - they may be forced to pick sides, and the winner may be determined by how much money the players are willing to spend chasing users.

There has been a significant shift in the user base of Facebook and the recent redesign of the site both acknowledges the change and hastens it. The first generation of Facebook users is moving on to greener pastures, while the second generation and third generation move in. This posts largely covers the generations and phases of users, and Part II covers the evolution of Facebook in light of the changing member base.

The first generation of FB users has its roots in the Gen Y American college crowd, originally the only members of FB. The second generation is primarily high school students and office-working American Gen X that discovered FB when it opened its doors to the public and new college students. The third generation consists of new college students, mid-adopters, professionals, and international users. The third generation has a number of subdivisions, but for our purposes we’ll keep it simple. Common to all three current generations are new college students, which may not be a given in successive generations as new sites launch to capture the youth market.

The life-cycle of a FB user can loosely be defined in three phases: Enthusiast, Average User and Mail User. Enthusiasts spend countless hours discovering friends, adding Apps, playing games and wondering how they could have ever lived without FB. Average Users log in, check their friend’s statuses, answer and send email, browse a bit and move on. Mail users simply log in to respond to and send email to people they don’t communicate with outside of FB. Users in each phase spend less time on the site as they move through the cycle. I’d love to see what this curve looks like in terms of membership numbers. If anyone at FB sends this data to me I promise to keep it secret.

Where the bulk of first generation users moved through the phases in a smooth and successive pattern, second generation users hop in at different phases, sometimes straight to Mail User. They log on infrequently to mass accept friends, check mail and cycle valuable connections out of the FB garden.

The user churn would be a dramatic loss for FB, however when users “move on,” they don’t close their accounts. Instead, they spend significantly less time on the system, turn off their Apps, and only return to the system for a high value event, such as mail from a valued contact. This makes the loss less painful, but it’s a loss nonetheless.

If Facebook were to release a desktop client for mail, many of the older users would no longer visit the actual website. As mail becomes the biggest (only?) value add for long-time users will we see an app that auto-responds to messages with the recipients email or sms number, or auto forwards the message?

Faced with this life-cycle curve and the user churn, Facebook has implemented a number of changes including a redesign, Facebook Connect, FB Mobile and an international push. FB is hoping these changes will keep these users active.

Stay tuned for Part II where we’ll dive into these initiatives and their implications. There may be an intermediate post listing the triggers I discovered that lead me to these posts. Are you interested? Please let me know.

** Clearly this is not a research paper, just the observations of a professional in the field. This post is intended to provoke thought and conversation, please don’t flame me if others have written on this topic.

Please vote for my SXSW panel:

Cultural anthropology will become increasingly important to social media marketers, community managers and brand advocates as Internet users develop communal ties through technology. Social media and social networks have significantly increased social interactions online, creating cultural pools throughout the Internet. As outsiders or participant-observers we must study a culture before interacting with it in order to achieve our goals, whether messaging, management or motivation.

We’ll start by exploring the identification of norms, values, mores and symbols of online communities, while establishing more efficient practices of building targeted campaigns and community outreach based on this information. We’ll conclude with some examples and case studies and specific methodologies of creating ethnographies of communities.

Update: Please see these instructions!

Today I’m giving a presentation on the history and future of social networks and social media at the American Public Gardens Association conference in Pasadena. I’ve attached the powerpoint and will be updating this post with the latest version as the afternoon progresses. This is released under Creative Commons, so please feel free to use this preso!

This year there will continue to be a big discussion about portable identities on Social Networks. The ability for people to bring their identity and friends from one network to another is going to be one of the next stages of the evolution of SN’s. This year there will continue to be a big discussion about portable identities on Social Networks. The ability for people to bring their identity and friends from one network to another is going to be one of the next stages of the evolution of SN’s. As Jeff Weiner from Yahoo (they’re having a bad day) said at EconSM last week, people are getting sick of signing up for network after network (paraphrasing). I agree that most people, like me, are not interested in spamming their friends with invites every time they join a Dodgeball or Twitter, but I disagree that the users of niche social networks are reluctant to invite their friends.

Getting back to the point, I join a lot of networks just to try them out. The thought of bringing my friends from one to another is intriguing, however I would need the ability to assign context to each of my friends. For instance, I wouldn’t want to bring most of my LinkedIn contacts over to Yelp, because all of those friends have different context. Currently many networks let members import contacts, but the import mechanism often insists that everyone you know that’s active on the site should be invited to connect, or it makes you browse through hundreds (if not thousands!) of contacts to pick and choose people to connect with. Even if this were perfect, and I assigned context prior to importing, I’d still end up spamming the same people over and over again with invites every time I want to try out the latest and greatest. Let’s call the solution “Context driven portable network identities.” I’ll work on an acronym-friendly version later.

My experience is a much different experience than most members joining anetwork, but down the road we’ll see this issue moving more mainstream. Being on the forefront of the evolution of the social internet helps our company anticipate changes in the marketplace. We strive to be at the sweet spot of the market - providing clients with the tools they need to create meaningful experiences for their members, while making sure our clients stay ahead of the technology curve.